The NHS is facing a real terms funding cut next year despite pledges by the
Coalition to protect the health service and increase budgets, it has been
claimed.

The Department of Health published the funding details for local NHS bodies with the average increase of three per cent for next year.

However it has been argued that this figure includes one-off pots of money for extra dentistry and pharmacy spending plus some cash that will have to be passed on to local authorities for social care.

It means the increase in funding is reduced to an average of 2.2 per cent, below the 2.5 per cent inflation figure used by the NHS.

Labour leader Ed Miliband raised the point with David Cameron at Prime Minister's Questions, arguing that the Coalition was breaking its promises.

The Department released a series of documents on the NHS reforms and plans for the future. GPs will be given control over much of the NHS budget and form consortia to arrange and buy care for their patients as previously planned.

Primary Care Trusts and Strategic Health Authorities will be scrapped as ministers have ordered management costs be cut by 45 per cent.

However some experts warned that the pace and scale of reforms was too much to ask at the same time as financial constraints meant the NHS has to find £20bn of savings over the next four years to cope with increasing demand.

Dr Hamish Meldrum, Chairman of the British Medical Association, said: “The government also seems to have ignored the warnings of the BMA and many others about the pace and scale of these reforms.

"Change of this magnitude was always going to be a challenge and the worsening financial pressures on the NHS, coupled with the ambitious timescale and lack of detail, make the present strategy very risky.

"Given the latest inflation figures, we do not accept the government’s claim that it is increasing real terms funding for the NHS.

"The stated three per cent “increase” in funding for Primary Care Trusts includes £1 billion already announced to cover additional social care responsibilities and masks the fact that hospitals will have to do a lot more work to achieve the same income.

"Patients across the country are already discovering that local services are being rationed to achieve efficiency savings, and there are likely to be further NHS cuts on a scale we have not seen for many years."

Nigel Edwards, acting chief executive of the NHS Confederation, said: “The scale of the challenge facing the NHS is immense. NHS organisations are grappling with three major issues, all at the same time: unprecedented efficiency savings, major management cuts and radical structural reforms.

"There is a real squeeze on hospital budgets that will seriously effect their income. NHS leaders up and down the country are really worried about the prospects for the next two to three years.

“While we support the objectives of these reforms, we have to get there first. The absolute priority is to be realistic about the dangers of transition and take firm action to avert them so the reforms have a chance of success. We now seem to have come too far for there to be a practical way of turning back. The government has moved some way in terms of recognising the issues but we need to see more."

Brendan Barber, TUC General Secretary said: “The Conservatives would not even have a share of power if they had not promised to protect the NHS budget and stop top-down re-organisation.

“Yet today it’s clear that there will be cuts, top-down organisation and privatisation by stealth as private companies increasingly run parts of a fragmented market-based NHS. And these ‘reforms’ are likely to cost £2-3 billion at a time when health spending is being cut in real terms."